In today’s top stories, takeover deals were in the spotlight. Twitter’s board accepted Tesla billionaire Elon Musk’s (pictured) offer to acquire the social media company and Blackstone is set to buy a real estate investment trust for $7.6bn. As investors prepare for a bumper week of tech earnings, analysts see downside pressure for semiconductor and solar stocks.
Twitter accepts Musk’s deal
After days of deliberation and initial opposition from many of its staff, Twitter [TWTR] has accepted Elon Musk’s $44bn takeover bid, valuing the company at $54.20 per share, the Wall Street Journal reported. If the deal goes through, it will be one of the largest tech company acquisitions ever and will likely impact the entire social media space. The Twitter share price rose 5.7% on Monday after the offer was accepted.
The UK bank is forecasted to report positive earnings growth in its first quarter results on 29 April, helped by a favourable high interest rate environment. Profits are expected to rise by 5% year-over-year to £873m in the three months ended 31 March. The stock has outpaced peers Barclays [BARC.L] and Lloyds [LLOY.L] in the year-to-date but has underperformed rival HSBC.
Semiconductors could be ‘uninvestable’
Despite record sales in 2021 and existing supply all but sold out for 2022 amid the continuing global chip shortage, one analyst called the semiconductor sector “almost uninvestable”, MarketWatch reported. Key semiconductor indices are down since the start of the year, which would ordinarily indicate a buying opportunity, but there are fears of a repeat of 2018 when rising prices and high sales led to a halt in demand and a glut of unsold supply.
The GlaxoSmithKline [GSK] share price has shown a strong performance in the past 12 months. With the stock up around 10% year-to-date, promising first-quarter earnings, due on 27 April, could lift it even higher. While the failed Unilever [UL] bid caused a hiccup in January, GSK has been boosted by its Covid-19 antibody drug sotrovimab, shingles vaccine and HIV treatment, as well as the success of its consumer business.
Big tech earnings could boost markets
Though US stock futures dipped slightly on Tuesday, the Nasdaq and Dow Jones Industrial Average made a comeback on Monday when several tech giants gaining ahead of a bumper week of earnings. Microsoft [MSFT], Apple [AAPL], Alphabet [GOOGL], Amazon [AMZN] and Meta [FB] are among the companies due to report. “A third of the S&P is reporting this week, and you’re probably going to see much of the same: lots of top and bottom line beats,” Oanda analyst Edward Moya said, as reported by CNBC..
Blackstone buys PS Business Parks
Private equity firm Blackstone [BX] announced it had reached an agreement to buy real estate investment trust (REIT) PS Business Parks [PSB] for $7.6bn. The deal follows Blackstone’s purchase of student housing company American Campus Communities [ACC] as the firm continues its expansion into the US real estate industry. PS Business Parks shares surged 12% in premarket trading on Monday.
Trouble for solar stocks
A significant decline in US shipments of solar panels in early 2022 could bring headwinds for the industry, which had a knockout 2021 as demand for alternative energy rose. Though disruption in the supply of photovoltaic cells from China is likely to impact first-quarter numbers, some analysts are still forecasting sales growth, MarketWatch reported. Two solar stocks are looking particularly strong: Enphase [ENPH] and SolarEdge [SEDG], which are both expected to see promising earnings growth this year.
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